When an industry is disrupted, the predominant view is that new entrants benefit at the expense of incumbents, who are pictured as slow‐moving, inert, and incapable to change. Based on a longitudinal multiple case study with data over a 15‐year period, we challenge this view. By studying the action responses of three incumbent firms and three new entrants to a major regulatory change in the life insurance industry, we find that both incumbents and new entrants can succeed if complementary assets are correctly managed. In particular, firms need to acquire and refine certain key assets needed for exploiting new business opportunities and, subsequently, need to enhance the value of their complementary assets by transforming them from generic to specialized and on to co‐specialized stages. These findings have theoretical implications for the literature on strategy and innovation management. In addition, we outline important managerial implications to transform complementary assets to stages with higher value.